Illinois HB3869 (Oct. 2011)

8/3/2019 Illinois HB3869 (Oct. 2011)

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97TH GENERAL ASSEMBLY

State of Illinois

2011 and 2012

HB3869

by Rep. Dave Winters

SYNOPSIS AS INTRODUCED:

35 ILCS 105/2 from Ch. 120, par. 439.2

35 ILCS 110/2 from Ch. 120, par. 439.32

Amends the Use Tax Act and the Service Use Tax Act. Removes provisions

of the Acts, beginning on the first day of the first month to occur not less

than 30 days after the effective date of the amendatory Act, providing that

the terms "retailer maintaining a place of business in this State" (in the

Use Tax Act) and "serviceman maintaining a place of business in this State"

(in the Service Use Tax Act) include a retailer or serviceman having a

contract with a person located in this State under which the person

directly or indirectly refers potential customers to the retailer or

serviceman by a link on the person's Internet website. Effective

immediately.

LRB097 14114 HLH 58792 b

FISCAL NOTE ACTMAY APPLY

A BILL FOR

*LRB09714114HLH58792bHB3869

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AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois,

represented in the General Assembly:

Section 5. The Use Tax Act is amended by changing Section 2

as follows:

(35 ILCS 105/2) (from Ch. 120, par. 439.2)

Sec. 2. "Use" means the exercise by any person of any right

or power over tangible personal property incident to the

ownership of that property, except that it does not include the

sale of such property in any form as tangible personal property

in the regular course of business to the extent that such

property is not first subjected to a use for which it was

purchased, and does not include the use of such property by its

owner for demonstration purposes: Provided that the property

purchased is deemed to be purchased for the purpose of resale,

despite first being used, to the extent to which it is resold

as an ingredient of an intentionally produced product or

by-product of manufacturing. "Use" does not mean the

demonstration use or interim use of tangible personal property

by a retailer before he sells that tangible personal property.

For watercraft or aircraft, if the period of demonstration use

or interim use by the retailer exceeds 18 months, the retailer

shall pay on the retailers' original cost price the tax imposed

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by this Act, and no credit for that tax is permitted if the

watercraft or aircraft is subsequently sold by the retailer.

"Use" does not mean the physical incorporation of tangible

personal property, to the extent not first subjected to a use

for which it was purchased, as an ingredient or constituent,

into other tangible personal property (a) which is sold in the

regular course of business or (b) which the person

incorporating such ingredient or constituent therein has

undertaken at the time of such purchase to cause to be

transported in interstate commerce to destinations outside the

State of Illinois: Provided that the property purchased is

deemed to be purchased for the purpose of resale, despite first

being used, to the extent to which it is resold as an

ingredient of an intentionally produced product or by-product

of manufacturing.

"Watercraft" means a Class 2, Class 3, or Class 4

watercraft as defined in Section 3-2 of the Boat Registration

and Safety Act, a personal watercraft, or any boat equipped

with an inboard motor.

"Purchase at retail" means the acquisition of the ownership

of or title to tangible personal property through a sale at

retail.

"Purchaser" means anyone who, through a sale at retail,

acquires the ownership of tangible personal property for a

valuable consideration.

"Sale at retail" means any transfer of the ownership of or

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title to tangible personal property to a purchaser, for the

purpose of use, and not for the purpose of resale in any form

as tangible personal property to the extent not first subjected

to a use for which it was purchased, for a valuable

consideration: Provided that the property purchased is deemed

to be purchased for the purpose of resale, despite first being

used, to the extent to which it is resold as an ingredient of

an intentionally produced product or by-product of

manufacturing. For this purpose, slag produced as an incident

to manufacturing pig iron or steel and sold is considered to be

an intentionally produced by-product of manufacturing. "Sale

at retail" includes any such transfer made for resale unless

made in compliance with Section 2c of the Retailers' Occupation

Tax Act, as incorporated by reference into Section 12 of this

Act. Transactions whereby the possession of the property is

transferred but the seller retains the title as security for

payment of the selling price are sales.

"Sale at retail" shall also be construed to include any

Illinois florist's sales transaction in which the purchase

order is received in Illinois by a florist and the sale is for

use or consumption, but the Illinois florist has a florist in

another state deliver the property to the purchaser or the

purchaser's donee in such other state.

Nonreusable tangible personal property that is used by

persons engaged in the business of operating a restaurant,

cafeteria, or drive-in is a sale for resale when it is

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transferred to customers in the ordinary course of business as

part of the sale of food or beverages and is used to deliver,

package, or consume food or beverages, regardless of where

consumption of the food or beverages occurs. Examples of those

items include, but are not limited to nonreusable, paper and

plastic cups, plates, baskets, boxes, sleeves, buckets or other

containers, utensils, straws, placemats, napkins, doggie bags,

and wrapping or packaging materials that are transferred to

customers as part of the sale of food or beverages in the

ordinary course of business.

The purchase, employment and transfer of such tangible

personal property as newsprint and ink for the primary purpose

of conveying news (with or without other information) is not a

purchase, use or sale of tangible personal property.

"Selling price" means the consideration for a sale valued

in money whether received in money or otherwise, including

cash, credits, property other than as hereinafter provided, and

services, but not including the value of or credit given for

traded-in tangible personal property where the item that is

traded-in is of like kind and character as that which is being

sold, and shall be determined without any deduction on account

of the cost of the property sold, the cost of materials used,

labor or service cost or any other expense whatsoever, but does

not include interest or finance charges which appear as

separate items on the bill of sale or sales contract nor

charges that are added to prices by sellers on account of the

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seller's tax liability under the "Retailers' Occupation Tax

Act", or on account of the seller's duty to collect, from the

purchaser, the tax that is imposed by this Act, or, except as

otherwise provided with respect to any cigarette tax imposed by

a home rule unit, on account of the seller's tax liability

under any local occupation tax administered by the Department,

or, except as otherwise provided with respect to any cigarette

tax imposed by a home rule unit on account of the seller's duty

to collect, from the purchasers, the tax that is imposed under

any local use tax administered by the Department. Effective

December 1, 1985, "selling price" shall include charges that

are added to prices by sellers on account of the seller's tax

liability under the Cigarette Tax Act, on account of the

seller's duty to collect, from the purchaser, the tax imposed

under the Cigarette Use Tax Act, and on account of the seller's

duty to collect, from the purchaser, any cigarette tax imposed

by a home rule unit.

The phrase "like kind and character" shall be liberally

construed (including but not limited to any form of motor

vehicle for any form of motor vehicle, or any kind of farm or

agricultural implement for any other kind of farm or

agricultural implement), while not including a kind of item

which, if sold at retail by that retailer, would be exempt from

retailers' occupation tax and use tax as an isolated or

occasional sale.

"Department" means the Department of Revenue.

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"Person" means any natural individual, firm, partnership,

association, joint stock company, joint adventure, public or

private corporation, limited liability company, or a receiver,

executor, trustee, guardian or other representative appointed

by order of any court.

"Retailer" means and includes every person engaged in the

business of making sales at retail as defined in this Section.

A person who holds himself or herself out as being engaged

(or who habitually engages) in selling tangible personal

property at retail is a retailer hereunder with respect to such

sales (and not primarily in a service occupation)

notwithstanding the fact that such person designs and produces

such tangible personal property on special order for the

purchaser and in such a way as to render the property of value

only to such purchaser, if such tangible personal property so

produced on special order serves substantially the same

function as stock or standard items of tangible personal

property that are sold at retail.

A person whose activities are organized and conducted

primarily as a not-for-profit service enterprise, and who

engages in selling tangible personal property at retail

(whether to the public or merely to members and their guests)

is a retailer with respect to such transactions, excepting only

a person organized and operated exclusively for charitable,

religious or educational purposes either (1), to the extent of

sales by such person to its members, students, patients or

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inmates of tangible personal property to be used primarily for

the purposes of such person, or (2), to the extent of sales by

such person of tangible personal property which is not sold or

offered for sale by persons organized for profit. The selling

of school books and school supplies by schools at retail to

students is not "primarily for the purposes of" the school

which does such selling. This paragraph does not apply to nor

subject to taxation occasional dinners, social or similar

activities of a person organized and operated exclusively for

charitable, religious or educational purposes, whether or not

such activities are open to the public.

A person who is the recipient of a grant or contract under

Title VII of the Older Americans Act of 1965 (P.L. 92-258) and

serves meals to participants in the federal Nutrition Program

for the Elderly in return for contributions established in

amount by the individual participant pursuant to a schedule of

suggested fees as provided for in the federal Act is not a

retailer under this Act with respect to such transactions.

Persons who engage in the business of transferring tangible

personal property upon the redemption of trading stamps are

retailers hereunder when engaged in such business.

The isolated or occasional sale of tangible personal

property at retail by a person who does not hold himself out as

being engaged (or who does not habitually engage) in selling

such tangible personal property at retail or a sale through a

bulk vending machine does not make such person a retailer

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hereunder. However, any person who is engaged in a business

which is not subject to the tax imposed by the "Retailers'

Occupation Tax Act" because of involving the sale of or a

contract to sell real estate or a construction contract to

improve real estate, but who, in the course of conducting such

business, transfers tangible personal property to users or

consumers in the finished form in which it was purchased, and

which does not become real estate, under any provision of a

construction contract or real estate sale or real estate sales

agreement entered into with some other person arising out of or

because of such nontaxable business, is a retailer to the

extent of the value of the tangible personal property so

transferred. If, in such transaction, a separate charge is made

for the tangible personal property so transferred, the value of

such property, for the purposes of this Act, is the amount so

separately charged, but not less than the cost of such property

to the transferor; if no separate charge is made, the value of

such property, for the purposes of this Act, is the cost to the

transferor of such tangible personal property.

"Retailer maintaining a place of business in this State",

or any like term, means and includes any of the following

retailers:

1. A retailer having or maintaining within this State,

directly or by a subsidiary, an office, distribution house,

sales house, warehouse or other place of business, or any

agent or other representative operating within this State

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under the authority of the retailer or its subsidiary,

irrespective of whether such place of business or agent or

other representative is located here permanently or

temporarily, or whether such retailer or subsidiary is

licensed to do business in this State. However, the

ownership of property that is located at the premises of a

printer with which the retailer has contracted for printing

and that consists of the final printed product, property

that becomes a part of the final printed product, or copy

from which the printed product is produced shall not result

in the retailer being deemed to have or maintain an office,

distribution house, sales house, warehouse, or other place

of business within this State.

1.1. Beginning July 1, 2011, and until the first day of

the first month to occur not less than 30 days after the

effective date of this amendatory Act of the 97th General

Assembly, a retailer having a contract with a person

located in this State under which the person, for a

commission or other consideration based upon the sale of

tangible personal property by the retailer, directly or

indirectly refers potential customers to the retailer by a

link on the person's Internet website. The provisions of

this paragraph 1.1 shall apply only if the cumulative gross

receipts from sales of tangible personal property by the

retailer to customers who are referred to the retailer by

all persons in this State under such contracts exceed

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$10,000 during the preceding 4 quarterly periods ending on

the last day of March, June, September, and December.

1.2. Beginning July 1, 2011, a retailer having a

contract with a person located in this State under which:

A. the retailer sells the same or substantially

similar line of products as the person located in this

State and does so using an identical or substantially

similar name, trade name, or trademark as the person

located in this State; and

B. the retailer provides a commission or other

consideration to the person located in this State based

upon the sale of tangible personal property by the

retailer.

The provisions of this paragraph 1.2 shall apply only if

the cumulative gross receipts from sales of tangible

personal property by the retailer to customers in this

State under all such contracts exceed $10,000 during the

preceding 4 quarterly periods ending on the last day of

March, June, September, and December.

2. A retailer soliciting orders for tangible personal

property by means of a telecommunication or television

shopping system (which utilizes toll free numbers) which is

intended by the retailer to be broadcast by cable

television or other means of broadcasting, to consumers

located in this State.

3. A retailer, pursuant to a contract with a

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broadcaster or publisher located in this State, soliciting

orders for tangible personal property by means of

advertising which is disseminated primarily to consumers

located in this State and only secondarily to bordering

jurisdictions.

4. A retailer soliciting orders for tangible personal

property by mail if the solicitations are substantial and

recurring and if the retailer benefits from any banking,

financing, debt collection, telecommunication, or

marketing activities occurring in this State or benefits

from the location in this State of authorized installation,

servicing, or repair facilities.

5. A retailer that is owned or controlled by the same

interests that own or control any retailer engaging in

business in the same or similar line of business in this

State.

6. A retailer having a franchisee or licensee operating

under its trade name if the franchisee or licensee is

required to collect the tax under this Section.

7. A retailer, pursuant to a contract with a cable

television operator located in this State, soliciting

orders for tangible personal property by means of

advertising which is transmitted or distributed over a

cable television system in this State.

8. A retailer engaging in activities in Illinois, which

activities in the state in which the retail business

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engaging in such activities is located would constitute

maintaining a place of business in that state.

"Bulk vending machine" means a vending machine, containing

unsorted confections, nuts, toys, or other items designed

primarily to be used or played with by children which, when a

coin or coins of a denomination not larger than $0.50 are

inserted, are dispensed in equal portions, at random and

without selection by the customer.

(Source: P.A. 95-723, eff. 6-23-08; 96-1544, eff. 3-10-11.)

Section 10. The Service Use Tax Act is amended by changing

Section 2 as follows:

(35 ILCS 110/2) (from Ch. 120, par. 439.32)

Sec. 2. "Use" means the exercise by any person of any right

or power over tangible personal property incident to the

ownership of that property, but does not include the sale or

use for demonstration by him of that property in any form as

tangible personal property in the regular course of business.

"Use" does not mean the interim use of tangible personal

property nor the physical incorporation of tangible personal

property, as an ingredient or constituent, into other tangible

personal property, (a) which is sold in the regular course of

business or (b) which the person incorporating such ingredient

or constituent therein has undertaken at the time of such

purchase to cause to be transported in interstate commerce to

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destinations outside the State of Illinois.

"Purchased from a serviceman" means the acquisition of the

ownership of, or title to, tangible personal property through a

sale of service.

"Purchaser" means any person who, through a sale of

service, acquires the ownership of, or title to, any tangible

personal property.

"Cost price" means the consideration paid by the serviceman

for a purchase valued in money, whether paid in money or

otherwise, including cash, credits and services, and shall be

determined without any deduction on account of the supplier's

cost of the property sold or on account of any other expense

incurred by the supplier. When a serviceman contracts out part

or all of the services required in his sale of service, it

shall be presumed that the cost price to the serviceman of the

property transferred to him or her by his or her subcontractor

is equal to 50% of the subcontractor's charges to the

serviceman in the absence of proof of the consideration paid by

the subcontractor for the purchase of such property.

"Selling price" means the consideration for a sale valued

in money whether received in money or otherwise, including

cash, credits and service, and shall be determined without any

deduction on account of the serviceman's cost of the property

sold, the cost of materials used, labor or service cost or any

other expense whatsoever, but does not include interest or

finance charges which appear as separate items on the bill of

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sale or sales contract nor charges that are added to prices by

sellers on account of the seller's duty to collect, from the

purchaser, the tax that is imposed by this Act.

"Department" means the Department of Revenue.

"Person" means any natural individual, firm, partnership,

association, joint stock company, joint venture, public or

private corporation, limited liability company, and any

receiver, executor, trustee, guardian or other representative

appointed by order of any court.

"Sale of service" means any transaction except:

(1) a retail sale of tangible personal property taxable

under the Retailers' Occupation Tax Act or under the Use

Tax Act.

(2) a sale of tangible personal property for the

purpose of resale made in compliance with Section 2c of the

Retailers' Occupation Tax Act.

(3) except as hereinafter provided, a sale or transfer

of tangible personal property as an incident to the

rendering of service for or by any governmental body, or

for or by any corporation, society, association,

foundation or institution organized and operated

exclusively for charitable, religious or educational

purposes or any not-for-profit corporation, society,

association, foundation, institution or organization which

has no compensated officers or employees and which is

organized and operated primarily for the recreation of

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persons 55 years of age or older. A limited liability

company may qualify for the exemption under this paragraph

only if the limited liability company is organized and

operated exclusively for educational purposes.

(4) a sale or transfer of tangible personal property as

an incident to the rendering of service for interstate

carriers for hire for use as rolling stock moving in

interstate commerce or by lessors under a lease of one year

or longer, executed or in effect at the time of purchase of

personal property, to interstate carriers for hire for use

as rolling stock moving in interstate commerce so long as

so used by such interstate carriers for hire, and equipment

operated by a telecommunications provider, licensed as a

common carrier by the Federal Communications Commission,

which is permanently installed in or affixed to aircraft

moving in interstate commerce.

(4a) a sale or transfer of tangible personal property

as an incident to the rendering of service for owners,

lessors, or shippers of tangible personal property which is

utilized by interstate carriers for hire for use as rolling

stock moving in interstate commerce so long as so used by

interstate carriers for hire, and equipment operated by a

telecommunications provider, licensed as a common carrier

by the Federal Communications Commission, which is

permanently installed in or affixed to aircraft moving in

interstate commerce.

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(4a-5) on and after July 1, 2003 and through June 30,

2004, a sale or transfer of a motor vehicle of the second

division with a gross vehicle weight in excess of 8,000

pounds as an incident to the rendering of service if that

motor vehicle is subject to the commercial distribution fee

imposed under Section 3-815.1 of the Illinois Vehicle Code.

Beginning on July 1, 2004 and through June 30, 2005, the

use in this State of motor vehicles of the second division:

(i) with a gross vehicle weight rating in excess of 8,000

pounds; (ii) that are subject to the commercial

distribution fee imposed under Section 3-815.1 of the

Illinois Vehicle Code; and (iii) that are primarily used

for commercial purposes. Through June 30, 2005, this

exemption applies to repair and replacement parts added

after the initial purchase of such a motor vehicle if that

motor vehicle is used in a manner that would qualify for

the rolling stock exemption otherwise provided for in this

Act. For purposes of this paragraph, "used for commercial

purposes" means the transportation of persons or property

in furtherance of any commercial or industrial enterprise

whether for-hire or not.

(5) a sale or transfer of machinery and equipment used

primarily in the process of the manufacturing or

assembling, either in an existing, an expanded or a new

manufacturing facility, of tangible personal property for

wholesale or retail sale or lease, whether such sale or

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lease is made directly by the manufacturer or by some other

person, whether the materials used in the process are owned

by the manufacturer or some other person, or whether such

sale or lease is made apart from or as an incident to the

seller's engaging in a service occupation and the

applicable tax is a Service Use Tax or Service Occupation

Tax, rather than Use Tax or Retailers' Occupation Tax.

(5a) the repairing, reconditioning or remodeling, for

a common carrier by rail, of tangible personal property

which belongs to such carrier for hire, and as to which

such carrier receives the physical possession of the

repaired, reconditioned or remodeled item of tangible

personal property in Illinois, and which such carrier

transports, or shares with another common carrier in the

transportation of such property, out of Illinois on a

standard uniform bill of lading showing the person who

repaired, reconditioned or remodeled the property to a

destination outside Illinois, for use outside Illinois.

(5b) a sale or transfer of tangible personal property

which is produced by the seller thereof on special order in

such a way as to have made the applicable tax the Service

Occupation Tax or the Service Use Tax, rather than the

Retailers' Occupation Tax or the Use Tax, for an interstate

carrier by rail which receives the physical possession of

such property in Illinois, and which transports such

property, or shares with another common carrier in the

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transportation of such property, out of Illinois on a

standard uniform bill of lading showing the seller of the

property as the shipper or consignor of such property to a

destination outside Illinois, for use outside Illinois.

(6) until July 1, 2003, a sale or transfer of

distillation machinery and equipment, sold as a unit or kit

and assembled or installed by the retailer, which machinery

and equipment is certified by the user to be used only for

the production of ethyl alcohol that will be used for

consumption as motor fuel or as a component of motor fuel

for the personal use of such user and not subject to sale

or resale.

(7) at the election of any serviceman not required to

be otherwise registered as a retailer under Section 2a of

the Retailers' Occupation Tax Act, made for each fiscal

year sales of service in which the aggregate annual cost

price of tangible personal property transferred as an

incident to the sales of service is less than 35%, or 75%

in the case of servicemen transferring prescription drugs

or servicemen engaged in graphic arts production, of the

aggregate annual total gross receipts from all sales of

service. The purchase of such tangible personal property by

the serviceman shall be subject to tax under the Retailers'

Occupation Tax Act and the Use Tax Act. However, if a

primary serviceman who has made the election described in

this paragraph subcontracts service work to a secondary

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serviceman who has also made the election described in this

paragraph, the primary serviceman does not incur a Use Tax

liability if the secondary serviceman (i) has paid or will

pay Use Tax on his or her cost price of any tangible

personal property transferred to the primary serviceman

and (ii) certifies that fact in writing to the primary

serviceman.

Tangible personal property transferred incident to the

completion of a maintenance agreement is exempt from the tax

imposed pursuant to this Act.

Exemption (5) also includes machinery and equipment used in

the general maintenance or repair of such exempt machinery and

equipment or for in-house manufacture of exempt machinery and

equipment. For the purposes of exemption (5), each of these

terms shall have the following meanings: (1) "manufacturing

process" shall mean the production of any article of tangible

personal property, whether such article is a finished product

or an article for use in the process of manufacturing or

assembling a different article of tangible personal property,

by procedures commonly regarded as manufacturing, processing,

fabricating, or refining which changes some existing material

or materials into a material with a different form, use or

name. In relation to a recognized integrated business composed

of a series of operations which collectively constitute

manufacturing, or individually constitute manufacturing

operations, the manufacturing process shall be deemed to

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commence with the first operation or stage of production in the

series, and shall not be deemed to end until the completion of

the final product in the last operation or stage of production

in the series; and further, for purposes of exemption (5),

photoprocessing is deemed to be a manufacturing process of

tangible personal property for wholesale or retail sale; (2)

"assembling process" shall mean the production of any article

of tangible personal property, whether such article is a

finished product or an article for use in the process of

manufacturing or assembling a different article of tangible

personal property, by the combination of existing materials in

a manner commonly regarded as assembling which results in a

material of a different form, use or name; (3) "machinery"

shall mean major mechanical machines or major components of

such machines contributing to a manufacturing or assembling

process; and (4) "equipment" shall include any independent

device or tool separate from any machinery but essential to an

integrated manufacturing or assembly process; including

computers used primarily in a manufacturer's computer assisted

design, computer assisted manufacturing (CAD/CAM) system; or

any subunit or assembly comprising a component of any machinery

or auxiliary, adjunct or attachment parts of machinery, such as

tools, dies, jigs, fixtures, patterns and molds; or any parts

which require periodic replacement in the course of normal

operation; but shall not include hand tools. Equipment includes

chemicals or chemicals acting as catalysts but only if the

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chemicals or chemicals acting as catalysts effect a direct and

immediate change upon a product being manufactured or assembled

for wholesale or retail sale or lease. The purchaser of such

machinery and equipment who has an active resale registration

number shall furnish such number to the seller at the time of

purchase. The user of such machinery and equipment and tools

without an active resale registration number shall prepare a

certificate of exemption for each transaction stating facts

establishing the exemption for that transaction, which

certificate shall be available to the Department for inspection

or audit. The Department shall prescribe the form of the

certificate.

Any informal rulings, opinions or letters issued by the

Department in response to an inquiry or request for any opinion

from any person regarding the coverage and applicability of

exemption (5) to specific devices shall be published,

maintained as a public record, and made available for public

inspection and copying. If the informal ruling, opinion or

letter contains trade secrets or other confidential

information, where possible the Department shall delete such

information prior to publication. Whenever such informal

rulings, opinions, or letters contain any policy of general

applicability, the Department shall formulate and adopt such

policy as a rule in accordance with the provisions of the

Illinois Administrative Procedure Act.

On and after July 1, 1987, no entity otherwise eligible

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under exemption (3) of this Section shall make tax free

purchases unless it has an active exemption identification

number issued by the Department.

The purchase, employment and transfer of such tangible

personal property as newsprint and ink for the primary purpose

of conveying news (with or without other information) is not a

purchase, use or sale of service or of tangible personal

property within the meaning of this Act.

"Serviceman" means any person who is engaged in the

occupation of making sales of service.

"Sale at retail" means "sale at retail" as defined in the

Retailers' Occupation Tax Act.

"Supplier" means any person who makes sales of tangible

personal property to servicemen for the purpose of resale as an

incident to a sale of service.

"Serviceman maintaining a place of business in this State",

or any like term, means and includes any serviceman:

1. having or maintaining within this State, directly or

by a subsidiary, an office, distribution house, sales

house, warehouse or other place of business, or any agent

or other representative operating within this State under

the authority of the serviceman or its subsidiary,

irrespective of whether such place of business or agent or

other representative is located here permanently or

temporarily, or whether such serviceman or subsidiary is

licensed to do business in this State;

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1.1. beginning July 1, 2011, and until the first day of

the first month to occur not less than 30 days after the

effective date of this amendatory Act of the 97th General

Assembly, having a contract with a person located in this

State under which the person, for a commission or other

consideration based on the sale of service by the

serviceman, directly or indirectly refers potential

customers to the serviceman by a link on the person's

Internet website. The provisions of this paragraph 1.1

shall apply only if the cumulative gross receipts from

sales of service by the serviceman to customers who are

referred to the serviceman by all persons in this State

under such contracts exceed $10,000 during the preceding 4

quarterly periods ending on the last day of March, June,

September, and December;

1.2. beginning July 1, 2011, having a contract with a

person located in this State under which:

A. the serviceman sells the same or substantially

similar line of services as the person located in this

State and does so using an identical or substantially

similar name, trade name, or trademark as the person

located in this State; and

B. the serviceman provides a commission or other

consideration to the person located in this State based

upon the sale of services by the serviceman.

The provisions of this paragraph 1.2 shall apply only if

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the cumulative gross receipts from sales of service by the

serviceman to customers in this State under all such

contracts exceed $10,000 during the preceding 4 quarterly

periods ending on the last day of March, June, September,

and December;

2. soliciting orders for tangible personal property by

means of a telecommunication or television shopping system

(which utilizes toll free numbers) which is intended by the

retailer to be broadcast by cable television or other means

of broadcasting, to consumers located in this State;

3. pursuant to a contract with a broadcaster or

publisher located in this State, soliciting orders for

tangible personal property by means of advertising which is

disseminated primarily to consumers located in this State

and only secondarily to bordering jurisdictions;

4. soliciting orders for tangible personal property by

mail if the solicitations are substantial and recurring and

if the retailer benefits from any banking, financing, debt

collection, telecommunication, or marketing activities

occurring in this State or benefits from the location in

this State of authorized installation, servicing, or

repair facilities;

5. being owned or controlled by the same interests

which own or control any retailer engaging in business in

the same or similar line of business in this State;

6. having a franchisee or licensee operating under its

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trade name if the franchisee or licensee is required to

collect the tax under this Section;

7. pursuant to a contract with a cable television

operator located in this State, soliciting orders for

tangible personal property by means of advertising which is

transmitted or distributed over a cable television system

in this State; or

8. engaging in activities in Illinois, which

activities in the state in which the supply business

engaging in such activities is located would constitute

maintaining a place of business in that state.

(Source: P.A. 96-1544, eff. 3-10-11.)

Section 99. Effective date. This Act takes effect upon

becoming law.

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Documents

Transcript of Illinois HB3869 (Oct. 2011)